Missing a loan payment can have significant consequences. It's important to understand the process and potential penalties involved to manage your loan effectively and avoid any unnecessary financial strain.
Late Payment Process
Initial Late Payment Fee
If a loan payment is missed, an immediate late payment fee is applied. This fee is calculated at 0.1% of the Loan premium and is charged daily.
Duration of Charges
These daily charges continue for a period of 10 calendar days. It's crucial to note that this fee accrues each day, adding to the total amount owed.
To keep the borrower informed, late payment notification emails are sent on specific days after the payment due date:
3rd Calendar Day: First notification email is sent, reminding the borrower of the missed payment and the ongoing daily charges.
6th Calendar Day: A second reminder email is dispatched, emphasizing the importance of making the payment to avoid further penalties.
9th Calendar Day: The final notification email is sent, alerting the borrower of the imminent sale of collateral if the payment is not made.
Collateral Sale and Loan Closure
If the loan payment is not made within these 10 calendar days, the collateral put up for the loan will be sold to cover the loan amount. Following this, the loan is considered closed.